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Research Letter
Health Care Reform
July 2015

Medicare Fee Cuts and Cardiologist-Hospital Integration

Author Affiliations
  • 1Department of Medicine, Massachusetts General Hospital, Boston
  • 2Department of Health Care Policy, Harvard Medical School, Boston, Massachusetts
JAMA Intern Med. 2015;175(7):1229-1231. doi:10.1001/jamainternmed.2015.2017

Physician practices are increasingly integrating with hospitals.1 For physicians, the expansion of accountable care organization contracts, centered on clinicians taking responsibility for population spending and quality, makes independent practice more challenging. For hospitals and health systems, acquiring practices helps them control referral patterns, coordinate care, and improve their bargaining power with payers.

In 2010, based on recommendations from the American Medical Association and a national practice expense survey of physicians, the Centers for Medicare & Medicaid Services reduced fees for cardiology services, focusing on those delivered in the office setting.2 For example, payment for a myocardial perfusion image in the office was cut 26%, compared with 5% in the hospital outpatient department (HOPD). Payment for an echocardiogram was cut 16% in the office, compared with a 3% increase in the HOPD setting. This widened the already existing payment gap favoring HOPDs—by 2013, an echocardiogram cost Medicare 141% more in HOPDs than in the office.3